National Adoption Month: Adoption and Estate Planning

If you are in the process of adopting a child or have recently adopted one, it is time to make necessary changes to your Estate Plan. 

Tip: If you have a Digital Estate Plan in place, see what life events calls for a change in your Digital Estate Plan.

All children are treated the same under the law – adopted or biological. This means your adopted children are treated in the same way as your biological children when it comes to Estate Planning – whether it is your Estate or the child’s adoptive grandparents’ Estate. 

5 modifications to make to your Estate Plan after adopting a child

1. If the adopted child is a minor, ensure you appoint a guardian in your Will. 
2. If you do not want your adopted child to receive assets outright when they turn 18, consider including a Trust so that they receive the assets at a later date. 
3. If the adoption is not yet finalized but you wish to pass your assets to the child, make specific inclusions in your Estate Plan. This ensures your wishes are fulfilled in case you pass away before the finalization. 
4. If your adopted child has specific needs, consider incorporating a Special Needs Trust in your Estate Plan. This allows you to keep aside some money for the child without jeopardizing the child’s right to receive government benefits. 
5. If you have both biological and adopted children, make arrangements for both of them to receive (or not) your assets as per your wishes. You might choose to equally divide your Estate amongst your children or choose to leave specific assets to some children. 

Additional Factors to Consider

The effects of step-parent adoption on your Estate Plan

Step-parents who help raise their spouse’s child but do not adopt the child do not have legal ties to the child that would entitle the child to inherit from them. If the step-parent’s Will or Trust merely provides that “all the children” receive an equal share, the stepchild will not receive anything. 

However, if you adopt your stepchild, they will be treated the same as your biological children when it comes to inheritance. The effects of a step-parent adoption on the stepchild’s right to inherit from the non-custodial birth parent vary across states. 

Second parent adoption

Individuals who are a part of a couple but not married can adopt a child who is the biological or adopted child of their partner without terminating the parental rights of the ‘first’ parent by using a second parent adoption under that state’s law. 

Biological Family

After adoption, the child loses the rights to inherit their biological parents’ Estate. If possible, the family members of the child’s biological parents must be made aware of the effects of adoption on Estate Planning so that they can plan accordingly. Say, the biological parent or any other family member still wants the child to inherit a part of their Estate, it must be clearly specified in their Will. 

Make sure an international adoption is legally recognized

When you adopt a child from another country, it is important to ensure the adoption is legally recognized not only in your state but all the other states as well. Not all foreign adoptions are finalized in the child’s country of origin, hence, it is important to finalize those adoptions in the United States. 

Even if the adoption was finalized in another country, not all states recognize those adoptions. A readoption, which is a review of the international adoption by a state court will ensure the adoption is not vulnerable to a challenge in the U.S. court if you move to a state that does not recognize foreign adoptions. This step also ensures your adopted child is legally entitled to inherit from you. 

Remember this before proceeding to make changes to your Estate Plan: Inheritance laws vary from state to state so it is imperative that you understand which one are applicable to you. 

If you die intestate, that is, die without a Will in place, your state’s intestate rules will be applicable to your Estate. This also means intestate inheritance laws will be applicable with respect to the adopted child. We have already mentioned above that each state has a different inheritance law so without a Will, the distribution of your Estates might not be as you wanted it to be. 

For more details on state-specific inheritance laws, have a look at Intestate Inheritance Rights for Adopted Persons.

Choosing to share your life with a child is a wonderful thing. Whether you have adopted a child recently or years ago, it is crucial to ensure your Estate Planning documents are up-to-date with this particular life event.